2015 (5) TMI 165

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....isited by the Jurisdictional Central Excise Officers on 4/2/2003. At that time, the stock of the finished products as well as inputs was checked. There was shortage of certain types of plastic granules valued at Rs. 10.87 lakh and there was excess stock of certain other types of inputs valued at Rs. 14.35 lakh. Similarly, in the stock of finished goods, there was shortage of certain type of components valued at Rs. 13.57 lakh and there was excess stock of other type of components valued at Rs. 8.27 lakh. The excess stock of inputs as well as finished goods was placed under seizure. With regard to the shortage of finished products, they paid the excise duty of Rs. 1,32,537/-. They also paid the CENVAT Credit involved in respect of the shorta....

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....oulds and dies, but subsequently when MUL paid the basic customs duty and additional customs duty on the imported moulds and dies and issued an invoice to the appellant, based on this invoice of MUL, the appellant amortized the amount of basic customs duty along with interest also and they took the CENVAT Credit of the additional custom duty. The differential duty payable on the amortized amount of the basic custom duty plus interest was Rs. 3,07,354/ - which on being pointed out by the department was paid. 1.4 It is in view of the above, that after issue of show cause notice, the Jurisdictional Additional Commissioner vide order-in-original dated 24/8/2004 confirmed the duty demand of Rs. 3,91,270/- in respect of the shortage of finishe....

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....as the Tribunal in its final order no. A/56358-56359/2013-EX [DB] dated 1/5/2013 in the case of Mark Auto Industries Ltd. Vs. CCE, Delhi-Ill and M/s. Rasandhik Engineering Industries, who are also the vendors of MUL, and who had also received the moulds and dies imported by MUL under EPCG Scheme, has held that while the differential duty on the account of amortization of the quantum of basic custom duty paid by MUL on the moulds and dies would be payable, no penalty would be imposable, as there was no intention on the part of the vendors to evade the duty; that the ratio of this judgment of the tribunal is squarely applicable to the facts of this case; that duty demand of Rs. 25,14,220/- which is based on the weight of difference between th....

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....rial on first, second and third February, 2003 had not been entered, the shortages and excess in respect of the raw material are not real shortages and excess and hence, the duty demand of Rs. 1,74,015/- in respect of the alleged shortage of raw material is not sustainable and that as regards the alleged shortage of the finished product, he is not disputing the same. 4. Sh. M.S. Negi, the ld. DR, defended the impugned order by reiterating the findings of the Commissioner (appeals) and pleaded that in respect of the shortage and excess in the stock of the inputs, at the time of officers' visit to the factory, it was never mentioned that the stock of the raw material maintained on the computer is updated up to 31/1/2003 only. He also p....

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....s the duty demand of Rs. 25,14,220/- it is based on the allegation that the appellant have inflated their raw material consumption/plastic granules and the excess consumption of CENVAT Credit availed plastic granules has actually been cleared without reversal of the credit. This allegation is based on the weight of the various plastic components as determined by the actual availment and the weight of the same component as intimated by the officials of the appellant company, as per their knowledge. In our view, just on the basis of the weight intimated by the appellants' officials and the actual availment of the component, it cannot be presumed that the appellant have inflated the consumption of raw material and have cleared the alleged ....

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....d in the computer as on 31/3/2003, in our view, the shortage of inputs valued at Rs. 10.87 lakh cannot be said to be real shortage and hence the duty demand of Rs. 1,74,015/- has to be set aside with equivalent penalty. 9. As regards, the shortage of stock in the finished goods involving duty of Rs. 2,17,255/-, the same is not disputed and hence the same is upheld along with interest and penalty. However, since the entire duty had been paid much before the issue of show cause notice, in accordance with the judgment of Hon'ble High Court of Delhi in the case of K.P Pouches Pvt. Ltd. Vs. Union of India reported in 2008 (228) ELT 31 DEL, the penalty is reduced to 25%. 10. As regards the confiscation of unaccounted finished goods, sin....